Lessons from Hyundai row: Why brands should stay away from politics

Howard Schultz, American businessman and the former chairman and CEO of Starbucks, really meant well when he launched a drive to write “Race Together” on the cups. But it didn’t go down well.

Kathleen Day, a business journalist and lecturer at Johns Hopkins Carey Business School, later told Fortune that, “It backfired because people [just] wanted a cup of coffee.”

High-street fashion chain Benetton was sued world over for a series of ads, which were deemed provocative and distasteful by many. The man behind these controversial images of the Italian sportswear brand was legendary photographer Oliviero Toscani.

After over two decades of association, the split came in April 2000. According to reports, Toscani was allegedly dumped by Benetton after the company’s sales were hit in the US due to his advertisements -- which once catapulted it to fame.

Back home in India, several brands have also crossed that thin line. Only to step back later. Two years ago, Bajaj Auto and Parle Products announced that they would not advertise their products on news channels that promote “toxic content”.

That year, jewellery brand Tanishq had to pull down an advertisement showing an interfaith marriage after being trolled on Twitter and Facebook. The brand was accused of promoting “Love Jihad”. Surf Excel’s Holi advertisement also drew similar backlash.

And now, a recent social media post by Hyundai’s affiliate  in Pakistan to commemorate the so-called Kashmir Solidarity Day has put the company in a tight spot in India. Hyundai is facing calls for a boycott by social media users in India and has now issued an apology.

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The matter also snowballed into a diplomatic row with the Ministry of External Affairs summoning South Korea’s Ambassador to express its strong displeasure over the social media post. The South Korean foreign minister, in a call with his Indian counterpart, has regretted the offence caused to Indians by the post.

While Hyundai India said it stands strong on its ethos of respecting nationalism in a statement on February 6th, its parent company apologised only on Tuesday. 

India said it expects foreign companies and their affiliates to refrain from making false and misleading comments on matters of sovereignty and territorial integrity.

Similar posts by a Kia dealership in Pakistan and American food chains KFC and Pizza Hut’s Pakistani arms  have also drawn strong reactions in India, forcing them to pull down the comments. KFC India has apologised for the post made by the Pakistan-based franchise.

Lloyd Mathias tells us what foreign companies should keep in mind when it comes to public communication.

Another expert, Harish Bijoor, says that global companies should also be careful when commenting on social issues. 

Wading into political issues will do more harm than good for multinational companies. Hyundai is India’s second-largest carmaker, selling over 5 lakh vehicles in the country last year and exporting over 1.3 lakh units.

Meanwhile its Pakistan venture sold just 8,903 cars in the whole of 2021. Companies would not want to risk a boycott in one of the world’s biggest consumer markets. 

Several foreign brands such as Dior, Calvin Klein, American Airlines, McDonald’s and Zara have learned similar lessons in the past. They have publicly apologised to Chinese consumers for either listing Taiwan and Hong Kong as separate countries on their websites or using maps that China sees as misrepresenting its territory.
 

Companies will have to learn to tread a cautious path when they operate across geographies. They simply cannot afford to take sides and make comments on geo-political issues, riling one side or the other, when the world is nothing but a one large market for them.

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